Almost two-thirds of first-time buyers in London are overestimating house prices by 9% on average, according the new research.
However Newham and Lewisham buck the trend with purchasers living there underestimating the cost of a home, which could leave them struggling to raise a deposit.
Barratt London surveyed 2,000 first-time buyers who were looking to buy in the capital over the next five years.
They were asked to guess the prices of properties in 12 London boroughs by only having the description of the property in front of them, along with the location.
Brent, Camden, Hammersmith and Fulham were perceived as most expensive along with Westminster where 79% of people overvalued the cost of a first floor, two-bedroom apartment in Marylebone
They guessed it was on the market for an average of £955,266 – 12% more than the listed price of £849,995.
In Lewisham, 2% of people overestimated the value, speculating the property would cost an average of £433,983 to buy.
Those who lived in Lewisham under-estimated the cost of a £425,000 two-bedroom, Victorian top floor split level flat by 4%, valuing the property at £407,861.
Interestingly, in Newham, the underestimate of price was 2% for residents, while people living outside the borough got the figure correct on average.
A spokesperson from Barratt London said: “A huge number of respondents clearly think that house prices in London are higher than they are, which comes as no surprise in today’s property climate.
“The research also revealed that first-time buyers in London are anticipating higher property values overall, location dependant or not.”
View the full results here .
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